Determine the average hourly cost of running the muffler shop if the cost of customer waiting time, in terms of customer dissatisfaction and lost goodwill, is $12 per hour of time spent waiting in line, and the mechanic is paid $8 per hour.

Question

Enzo Mcknight

Business

17 December, 07:03

Determine the average hourly cost of running the muffler shop if the cost of customer waiting time, in terms of customer dissatisfaction and lost goodwill, is $12 per hour of time spent waiting in line, and the mechanic is paid $8 per hour.

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Answers (1)

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Tara Hardin · Answer 1

Cost per hour is $20

Explanation:

A waiting line system is also known as a que line system. For example when a customer waits in line for a customer service officer. We have two levels of service for queueing. The low level is when the cost to the company is low or inexpensive. The high level is initially expensive for the company.

Various metrics are calculated in the waiting line mode aimed at increasing efficiency: average waiting time, average server utilisation in the system, average number of customers waiting for service, average time a customer spends in the system, and so on.

Total hourly cost for queue model is simply the sum of the waiting cost and service cost.

Therefore

Cost per hour = cost of customer waiting time + amount paid to the mechanic

Cost per hour = $12 + $8 = $20